HUL also markets ice creams and frozen desserts under the Magnum brand.

Vijaykant Dairy, which was set up in 2004, makes dairy and dairy-based products in Karnataka, Maharashtra, Goa and Kerala. It expanded into the ice cream and frozen desserts business, where it sells products under the flagship brand Adityaa Milk, and front-end distribution over the last five years.

Vijaykant Dairy will continue to pursue its dairy business after HUL acquires its other operations.

The transaction, which is subject to certain conditions, is expected to be completed over the next few months, HUL said. Vijaykant will manage the business until the transaction is done and will also continue to manufacture for HUL for a certain period, it added.

Shares of HUL declined 1.65% on the BSE to close at Rs 1730.50 apiece on Monday.

HUL’s ice cream brands operate in a crowded market where it competes with pan-India rivals such as Amul and Mother Dairy, regional players such as Arun, Havmor and Dairy Classic, and international players such as Baskin-Robbins, Häagen-Dazs and London Dairy.

Despite intense competition, India's ice cream market is the fastest-growing in the world. The domestic ice cream market grew at a compounded annual rate of 13% over the past five years, market research firm Mintel said in July last year. Ice cream sales in India were forecast to reach 381.8 million litres in 2017, overtaking the UK, and reach 657.2 million litres in 2021, Mintel said.

However, India’s ice cream market is still far smaller than the world’s biggest markets—China, the US and Japan, which clocked sales of an estimated 4.3 billion litres, 2.7 billion litres and 756 million litres, respectively in 2016, according to Mintel.

According to a recent report by Technopak, annual per capita consumption of ice cream in India is around 300 millilitres and the size of the industry is pegged at around Rs 6,000 crore.